Exclusive Interview with High Tide Founder, President, and CEO Raj Grover
In business for the past 10 years, High Tide (CSE: HITI) (OTC: HTDEF) is a well-established player in the cannabis industry. The company has built a sizable presence in the accessories space. Founder, President, and CEO Raj Grover talked with New Cannabis Ventures about how that experience is driving the company’s retail and wholesale business growth within Canada and on to international markets.
Before starting High Tide, Grover worked in the wholesale, manufacturing, and retail verticals. On a business trip in Southeast Asia, he came across pipes and other smoking accessories for sale. Comparing those price points to what he was seeing in the United States and Canada, an opportunity became clear. He started Smoker’s Corner (brick and mortar retail stores) in 2009, and the business took off. Just a year later, he started the wholesale brand RGR. When he first started, the company had around 200 SKUs. Today High Tide offers more than 4,500 SKUs and counting.
High Tide operates both brick and mortar retail stores, under the Smoker’s Corner and Canna Cabana brands, and online retail through Grasscity. The company has 13 Smoker’s Corner stores and 12 Canna Cabana stores, with more openings on the horizon. There are 25 stores under construction in Alberta, two acquisitions soon closing in Saskatchewan, and applications under review in British Columbia.
In 2018, High Tide acquired Amsterdam-based ecommerce platform Grasscity. The platform has 5.3 million annual site visits and millions of unique visitors talking about cannabis on its forum, according to Grover.
The company is adding to its product portfolio with a continuous commitment to research and development. At any given time, High Tide has 20 to 50 new products under development, according to Grover. He expects the company to reach 6,000 SKUs in the near future.
In Canada, High Tide is pursuing a presence in all provinces that allow for private retail, but Alberta, as the company’s home turf, and Ontario, as the largest Canadian market, are High Tide’s priority.
Although the Ontario and Alberta markets have been relatively slow to develop due to a lack of licensing, Grover expects to see more movement in those markets. In Ontario, High Tide was selected by two lottery winners, resulting in two Canna Cabana stores opening on 4/20 – one in Hamilton and one in Sudbury. High Tide is working with a third lottery winner to open a store in Toronto. The company is maintaining approximately 20 conditional leases in Ontario, according to Grover. When the province is ready for more locations, High Tide is prepared.
In Alberta, Grover has been expecting the Alberta Gaming and Liquor Commission (AGLC) will soon lift its moratorium on licensing. Subsequent to the interview, it did indeed add another 26 licenses. High Tide has 12 fully licensed, built, and ready stores, selling accessories in eight of them and selling accessories and cannabis in the other four. Grover expects that number to grow in the short-term.
As the Canna Cabana grows, High Tide is actively evaluating opportunities to take that retail arm into the United States. Additionally, the company is exploring the CBD business in the U.S. and international markets. Acquisitions that would fall into the company’s core business of manufacturing and distribution of accessories are also of interest. High Tide is taking an open approach to opportunities in all markets, including the U.S. and the EU.
On the retail front, High Tide understands the importance of consumer education, particularly as people shift from the black and grey markets to the legal market. The company educates its employees through a 40-hour program, developed in-house, which gives them a wealth of knowledge they can then share with consumers. Canna Cabana also offers the Cabana Club, a way to share information and product information with customers.
In addition to its retail business, High Tide also has thriving wholesale operations through RGR and Famous Brandz. RGR’s smoking accessories wholesale presence is expanding into the United States, expected to serve all 50 states, according to Grover. Famous Brandz wholesales cannabis accessories tied to celebrity names like Snoop Dogg and Cheech and Chong. This arm of High Tide’s business is also partnered with feature films like “Hell Boy” and “Beach Bums” to produced branded smoking accessories. Famous Brandz has a strong international reach; it’s products are sold in more than 20 countries and 3,000 stories.
This month, High Tide announced a $10 million capital raise with participation from Aphria. The proceeds from the raise will be used to build out Canna Cabana stores around Alberta, Ontario, and British Columbia. The company is sufficiently capitalized for now, but with so many opportunities proliferating in the industry, Grover sees the possibility of more capital raises in the future.
In the first quarter of fiscal 2019, High Tide reported $5 million in revenue, an 83% increase from the first quarter of 2018. As for the rest of 2019, Grover anticipates each quarter to have an increase in revenue over the previous one.
As more and more markets open up to cannabis –the United States, Europe, and South America– Grover sees a major opportunity for established companies like High Tide to take their growth international.